At SIBOS in Geneva this year, I was struck by how mainstream Blockchain and DLT had become, but also how varied people’s understanding of the technology was and how diverse views were of the potential impact on the industry. There seemed to be an implicit acceptance that DLT was going to be adopted, but the ‘business’ generally described DLT as ‘better technology’, while technologists were more bullish about it having the ability to fundamentally change the banks’ business models. As ever, the reality will probably be somewhere in the middle.
When asked what the top three themes were at SIBOS, technology is unsurprisingly, top of the list;
- Technology: The rise of Machine Learning and the emergence of Blockchain/ DLT and FinTech as mainstream,
- Cyber and FinCrime: The very real threat this poses to stability in the industry,
- Generational divergence: How divergent behaviours and demands from different generations will potentially shape the industry
However, what was also noticeable was the lack of focus on some topics that had previously been mainstream. For example, other than in the Innotribe sessions, some of the sociological and geo-political uncertainties were underplayed when I compare it to SIBOS in Singapore. Clearly, some of that focus in 2015 was driven by regional dynamics at the time, however when speaking to several clients the lack of coverage given to the persistent global threats and uncertainties was a surprise.
The exception was Cyber-crime, which remained a hot topic for SWIFT. Questions asked included; how will confidence in co-operation be dented if the very interconnectivity consumers demand actually opens them up to further attack? Are some cyber-attacks actually state sponsored? And how can financial services keep pace with the ever increasing frequency and sophistication of such attacks?
Another thread, was the underestimation as to how much competitive behaviour could slow the march to true transparency and co-operation. In many sessions, there seemed to be an assumption that everyone wanted to play fairly, openly and transparently, and although I expect many of us would like to think this the case, clearly competitive necessity will shape the impact these innovations will have and perhaps stifle their adoption and reach. With the advent of DLT the industry has seen genuine collaboration between banks through consortia (such as R3) and in the projects / proof-of-concepts they are running. Similarly the open-sourcing aspirations (e.g. Corda, Hyperledger Project) also point to more acceptance of the ‘sharing economy’. While the pessimist might argue that this will only last as long as the proofs-of-concepts, the widespread adoption of technology such as DLT is inherently dependent on collaboration.
This is where further focus and effort needs to be spent – breaking down the barriers further between millennials and baby-boomers, technologist and product managers, fintech and traditional financial services to build genuine trust on a non-competitive basis.I believe it is here where the industry needs to now make the most progress in order to realise the benefits from the technological innovations.